I’ve never seen a more compelling opportunity in the stock market than right now. A combination of cheap valuations and robust underlying company earnings suggest it’s a great time for me to double down on my investing efforts. And I’m aiming to build a Stocks and Shares ISA worth a million pounds.
Robust company results
The almost relentless diet of negative macro-economic and geopolitical news we’ve seen has driven stock prices lower. Almost everyone has been worried. And some institutional and private investors have sold their stocks and shares. Others have been shorting them, which means they’ve been betting on stocks moving lower.
But I’ve noticed an interesting phenomenon in recent weeks. Many businesses have been reporting decent trading figures. Demand for their products and services has been robust, they’ve been saying. Profits are holding up. Growth prospects are on the agenda. You get the picture.
In many cases, the market has been surprised by such upbeat company announcements. I can tell by the rapid upticks in some share prices when positive news has been released.
Meanwhile, it’s known that the stock market looks forward. The mainstream news may be full of negative headlines, but they are reporting events on the ground. Those interested in investing in stocks and shares are more interested in what will likely happen in three, six or nine months’ time.
Stocks turning up
Therefore, when share prices start to turn up, I become interested. The first green shoots of better economic and geopolitical news are there to find for those willing to look. And, to me, they combine with strong company results to justify higher share prices.
When bear markets happen, stocks tend to ignore good news coming from businesses and react to bad news by moving lower. And bull markets often begin by stocks ignoring negative news and reacting to good news by moving higher.
I think I’m seeing the beginnings of a new bull market right now. And it makes sense. That’s because a point arrives in every bear market where all the negative news is priced in.
It won’t be easy for me to compound my Stocks and Shares ISA to the value of a million. Despite my positive view of the stock market’s potential, not all the shares I pick will go on to be big winners in my portfolio. Indeed, shares can fall as well as rise. And businesses can suffer operational setbacks at any time.
Nevertheless, I’m aiming to mitigate some of the risks of share ownership by working hard with my research. On top of that, I’m investing regularly in my ISA and aiming to invest for the long haul. But even then, there’s no guarantee of success for me.
Nevertheless, conditions are better than I’ve ever seen them right now. So I’m doubling down on my efforts and giving it my best shot.
